HPE Global Channel Chief Samuels On Removing Layers, Making Decisions Faster, Synergy's Impact On VMware, And Why Competitors Are 'Scared' Of HPE
Driving Faster Decision-Making And Higher Margins For Partners
Hewlett Packard Enterprise Global Channel Chief Denzil Samuels says the company's new combined channels and alliances organization is set to drive faster decision-making and bigger margins for partners.
"My message to partners is we are going to be able to make decisions with you a lot quicker, whether that decision is a turnaround time for a price quote, strategic outreach to areas, or white space we need to go after or escalation of issues," said Samuels, who is heading up the new channels and alliances organization. "We have removed layers."
Under the restructuring, HPE has combined all indirect organizations (value-added resellers, channel programs/operations, big systems integrator alliances, the big India six alliances, the top ISV alliances, Internet of Things alliances and OEM alliances) under a single channel and alliances organization headed by Samuels, who reports to HPE Enterprise Chief Sales Officer Phil Davis.
"We are going flat and we are going to expand what indirect means and we are going to have it under one umbrella – one partner program," said Samuels. "That is going to drive value and greater margins. As we shift from volume to value, it is going to drive greater margins for partners and better outcomes for customers."
What is the net impact of the move to flatten the channel organization by putting channels and alliances under a single organization under your leadership?
By putting everything under one umbrella that is indirect -- distribution, value-added resellers, channel programs/operations, big systems integrator alliances, the big India six alliances, the top ISV alliances, Internet of Things alliances and OEM alliances -- we now have one go-to-market movement from an indirect perspective with every category of channel partner. We now have one movement to market through indirect. That one movement to market is going to be governed by one program.
How important is to have a single program for all channels and alliances?
This takes us one step closer to having a single program that governs everything across indirect with ISV and alliances and OEM and Internet of Things. This is a value play. We have said all along that over time we are going to start to see a shift from volume to value. It is clearly happening. It is happening with our customers. They are looking for solutions that drive business outcomes, and this helps with that. Customers want to see digital transformation -- the SIs, IoT players and distributors can all help with that. What we are doing by making this change is we are truly driving the start of that shift from volume to value.
We are simplifying how easy it is to go to market with us – one partner program -- one approach to market that governs all partner categories.
What is the vision for the one partner program?
We are not going to make immediate changes, but when we make those changes we are going to have one partner program that does a number of things. It will go across every product category, geography, vertical and every business model. What we are doing with this is we are making it simpler, more focused and very, very customer- centric. We are going to allow our partners to really drive value for our end customers by putting everything under one umbrella, by having people focused and getting rid of layers of management that will allow us to be closer to the decision-makers. That is one of the keys to this change.
How big an impact will getting rid of layers of management have on the partner sales cycle?
My message to partners is we are going to be able to make decisions with you a lot quicker, whether that decision is a turnaround time for a price quote, strategic outreach to areas, or white space we need to go after, or escalation of issues. We have removed layers. Between our top accounts and myself, there is ultimately one layer. We are not going to have six or seven layers as we have had in previous structures.
We are going flat and we are going to expand what indirect means and we are going to have it under one umbrella – one partner program. That is going to drive value and greater margins. As we shift from volume to value, it is going to drive greater margins for partners and better outcomes for customers. That is what they want to buy -- they want to buy solutions that drive business outcomes.
How is that going to be reflected in the channel go-to-market?
It is going to simplify our go-to-market. A single solution doesn't have just one partner category. One solution could have a distributor working with a reseller to position a portfolio of products and services with that. Those services could also include ISV apps developed for that customer or integration services from our system integration partners. It could include IoT devices and OEM products like a GE Predix operating system embedded in one of our EdgeLine devices. Every single thing I just mentioned was previously in different pockets of the organization. Now they are in one place.
So we are going to be able to make decisions faster on solutions. We are going to be able to integrate various solutions quicker. We are going to be able to drive competencies to the market -- drive value to the market that is going to improve margins. We are going to reduce our own cost to serve. There is a number of benefits here that the partners are thrilled about.
What kind of partner reaction are you getting to the changes?
I just left a major distributor that I shared this story with, and they were thrilled. They said that depending on what country they were operating in they had to talk to five or six different people. Now they talk to one. They love it. Remember, more and more of our big partners have already moved to a global structure. Ingram Micro has a global structure. Tech Data has a global structure. Computacenter -- one of our top European partners -- has put a global structure in place.
What we are doing by really moving to this flat organization that includes multiple partner categories is that we go across all geographies and we make life simpler for partners to deal with us, do business with us, and for us to drive outcomes for the end customer.
How many organizational layers has HPE taken out with the new organization?
It varies by region. If you look at Europe -- one of the more complicated regions -- we had sub-regions within sub-regions. That is all gone. Now we have 11 geographies and those 11 geographies report into a single global sales leader. Each of those 11 geographies has an indirect leader who I will now have a day-to-day relationship [with]. In some cases, we have cut out one or two layers and in other cases four or five.
How many layers were eliminated by moving alliances together with channels?
As we started to look at that we wanted to make sure we didn't have VPs reporting into VPs. We wanted to make sure we were getting as close to the end partner as possible. In some cases, we removed two layers of management. I think that was needed.
We are keeping it very flat. It means I am going to have more direct reports. I am currently at 15 direct reports when I was at seven before. That's OK because we have removed in some cases two, three and more layers of management.
The future belongs to the fast. We had too many layers. We couldn't make decisions fast enough. We have now become lean, mean, agile and fast, and that is going to help us really compete hard. The people most scared about this are going to be our competitors. They know we are going to be fast now and they weren't worried about that before.
How does this position HPE and its partners to exploit emerging markets like hyper-converged?
If you look at North America, we have hyper-growth in hyper-converged going on right now. It is unbelievable. We are starting to see double-digit growth rates there. We have always seen that in Aruba. Now you are looking at SimpliVity, Nimble, Niara and you are seeing a solution stack that people are saying, 'Wow. We see the value and the benefit.’
Talk about Synergy and what kind of growth you are seeing there.
People are looking at Synergy and seeing if they implement it as a blade server they are getting containers – which, by the way, reduces VMware licenses by 30 [percent to] 40 percent -- bare metal and virtualization. And you are getting it all to position yourself for the future at a price point that is less than a blade replacement. How is a customer not going to jump at the value of that? This is material.
Our Synergy solutions are driving 30 [percent to] 40 percent reduction in VMware licenses and we are proving today they are coming in at a 15 percent less TCO [total cost of ownership] than the nearest competitive solution. How do you not just want to jump up and buy that? It is fantastic what has been going on. Then you add to that the services that we need to make it all happen, whether they are coming from Pointnext directly or coming from Pointnext through the channel or coming from our SI partners. It is stunning to see how every single one of these partner categories are now embracing these changes. They are very excited about it.
What has been the impact on the HPE partner program?
Partners realize we have the most profitable partner program on the planet, period. Everyone else pretends to. We have the best partner program and the most profitable partner program. We spend more than $2 billion in channel incentives. I don't even know where our nearest rival is. It is certainly a fraction of that number. They are all lining up to get on board.
Our Net Promoter scores for the partner program are off the charts. We have gained Net Promoter scores in the teens to the detriment of our competitors.
In every single category of the partner program we have scored higher than our competitors. In many of those categories we have taken percentage points away from our competitors.